An Exploration Into The Problems Of China's Small And Medium Enterprises'Fund

The Middle-and-small-size Enterprises play an important role in the development of China' s national economy. According to statistics, of the country' s total registered enterprises 99 percent are small and medium sized firms, which contribute 60 percent of China' s total industrial output, 40 percent of its tax revenue, 60 percent of its annual export. They are playing a more and more important role in creating jobs, in creating export and blazing new trails in science and technology, etc.There are many methods of circulating funds, such as issuing stock bond, making loans form bank and so on. Owing to many kinds of reasons, it is difficult for small and medium sized firms to obtain the funds they need badly to carry out production and management. The difficulty of raising funds becomes an obstacle to their further development. Making use of the experience of developed countries and combing our country' s practical condition, in this paper, the writer puts forward that constructing the credit guarantee"system of small and medium firms is a very important way of solving the difficulty of circulating fund. On one hand, the construction of credit guarantee system is helpful in obtaining the short-term loans needed by small and medium firms; on the other hand, it can-reduce bank' s risk of loans: while whether the credit guarantee organization will operate properly or not depends on its prevention and problem that this papers exploring. In order to control risk, in this paper, the writer put forward constructing the evaluation index of credit guarantee system so that we can select the better small and medium firms applying for loans. We can predict that the credit guarantee system can not be replaced by any other principle in solving the difficulty of raising funds if it can prevent risks effectively (as in Zhenjiang and Shenzhen) during the operation of credit guarantee organization.